Case 10: Luck Companies: Igniting Human Potential C-121occurred during the 2008-2009 timeframe. The United
States entered into a deep recession, the president of
the aggregate division, who had a record of excellent
performance, was asked to leave the company due to a
misalignment with the organization’s values, and Charlie
became seriously ill. These events put step 7, the final
step of testing the new leadership model, on hold as the
company worked to regain traction and overcome the
unfortunate events.Reduction in Force: 2008
Charlie said that in 2008 the “financials fell to pieces”.
The recession was really hitting all aspects of the stone
industry hard and for some of their products demand had
been eroding since 2006. The company had expanded to
just under 1200 associates in 2008 but it was obvious
to the leadership team that the sales were not going to
come back anytime soon and that they no longer had the
revenue to support such a large workforce.
In September 2008, things got so bad that the fed-
eral government had to help save several large US cor-
porations, and Mr. Luck said that “We then knew that
2009 was going to be worse than 2008”. Management
had already taken the typical expense reduction steps
such as a hiring freeze, delaying equipment purchases,
and cutting non-essential expenses. However, they now
realized that this recession was not like any they had ever
experienced before and that they were going to have to
take more drastic measures. In the end they came to the
conclusion that it would be better to operate with 125
fewer associates who had full pay and benefits than neg-
atively affect everyone. This decision was especially dif-
ficult for the managers of a company that had never had
a reduction in force in its entire history and was known
for treating its employees like family.
In the end they came to the conclusion that it would
be better to operate with 125 fewer associates than nega-
tively affect everyone.
Once the decision was made to have the firm’s first
ever company-wide reduction in force, Charlie and his
leadership team discussed the type of company and
associates they wanted to have once the recession was
over. They decided not to use seniority but instead revis-
ited their core values to guide them in their decisions
about who would no longer be an employee of the com-
pany. A generous separation package was prepared for
each departing employee, which “stretched the company.”
A video was prepared that explained in great detail why
the reduction was necessary and it was shown to every
employee on Tuesday, November 11, 2008. The showing
of the video ensured that every employee had exactly the
same information and hopefully slowed down the inev-
itable rumor mill. On Wednesday November 12, 2008,
and Thursday, November 13, 2008, managers met with
the employees that unfortunately had to be let go.
Commenting on the reduction, Charlie had this
to say: “We wanted our employees to say, ‘It’s an awful
thing to do, but you did it better than anybody else’”. We
wanted our people to say, “This is how a values-based
company does this.”
To aid employees after the RIF, Luck Companies
leased a building offsite and turned it into an Employee
Relocation Center. They helped the employees write
resumes, cover letters, and find new employment. As a
testament to the culture and values at Luck Companies,
many other companies reached out, eager to accept Luck
Companies’ ex-employees as new hires.
In March 2009, Charlie fell ill. At first he believed
that he had contracted the flu virus and would be back
to work soon. However, the illness worsened and Charlie
became bed-ridden for nearly 20 hours a day, with dis-
abling fatigue. The doctors were unable to diagnose his
illness. During this time Charlie thought a lot about the
life he had lived and what else could be done to fulfill
his purpose. After two long months he began to improve
and returned to work.The Values Journey Continues –
Phase III: 2009 – Present
In the fall of 2009, Charlie returned to an organization
that was comprised of businesses that were struggling
because of the recession. The past two years of Charlie’s
life had a significant impact on the way he wanted
to continue to run the company. After nearly dying,
Charlie decided the Vision 2020 was too far in the
future and not significant enough to achieve his goals
for the company. He rewrote the vision with an even
higher purpose and shortened the time span by five
years. The new mission was coined Mission 2015 and
states that; “We will ignite human potential around the
world and positively impact the lives of others through
values based leadership.”
He presented the mission to Mark Fernandes, Chief
Leadership Officer, and tasked him with making it oper-
ational. Mark knew that it would not be an easy job to
drive such a lofty mission at a time when the company
had fewer financial resources, fewer associates, and oper-
ated in markets that were in a recession. Despite these